Does Cross-Border E-Commerce Broaden the Innovation Boundaries of Firms? Evidence from a Quasi-Natural Experiment in China

Cross-border e-commerce (CBEC) is a driving force behind international trade and corporate upgrading in the era of global digital transformation. This research aims to investigate the extent to which the establishment of China’s Cross-Border E-Commerce Comprehensive Pilot Zones (CBECPZs) expands the innovation boundaries of firms. We employ a multi-period difference-in-differences (DID) model to analyse panel data for Chinese A-share listed companies from 2010 to 2023, viewing the phased introduction of CBECPZs as a quasi-natural experiment. The empirical results indicate that the establishment of CBECPZs substantially expands the innovation boundaries of firms, as evidenced by an increase in patent applications in new technological domains. This finding is confirmed by parallel-trend checks, propensity-score-matching DID, placebo testing, and double-machine-learning calculations. The mechanism analysis shows that CBEC mainly fosters innovation by improving enterprises’ digital-marketing capacities, reducing information asymmetry, promoting technology spillovers, and encouraging human-capital investment. In addition, the strategy promotes innovation more effectively for eastern Chinese companies, high-technology firms, and non-state-owned enterprises. This study provides micro-level evidence from China regarding the innovative effects of cross-border e-commerce and clarifies how digital trade redefines organisational innovation parameters. In doing so, it offers both theoretical and practical insights for policymakers refining CBEC regulations and businesses leveraging digital platforms for innovation advancement.